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Maryland Intermediate Appellate Court Finds that an Executed Release between an Auto Accident Victim and the Responsible Party’s Insurer cannot Bar the Victim’s Claim for Benefits against its own Insurer

Buckley v. Brethren Mut. Ins. Co.
No. 1855 (Md. App. Sept. 26, 2012)

by Wayne Heavener, Law Clerk
Semmes, Bowen & Semmes (

In Buckley v. Brethren Mutual Insurance Company, the Maryland intermediate appellate court considered whether a broad release executed between an injured auto accident victim and the responsible party's insurer can immunize the injured’s insurer from issuing benefits under an uninsured/underinsured motorist ("UM") provision to the insured’s policy. In particular, the Court of Special Appeals examined the issue in light of § 19-511(e) of the Maryland Insurance Article, which states that the insured may "execute releases in favor of the liability insurer and its insured without prejudice to any claim the injured person may have against the uninsured motorist insurer." MD. CODE ANN., INS. § 19-511(e) (1995, 2011 Repl. Vol.). Writing the majority opinion for the Court of Special Appeals, Judge Christopher B. Kehoe held that the victim's claim was not barred by the general release, and remanded the case in order to determine if the insured’s response to an arrangement offered by the party at fault’s insurer constituted consent on the part of the insurer.

On March 18, 2007, Ember L. Buckley was involved in a car accident caused by Harvey L. Betts. Ms. Buckley was Mr. Betts' passenger. Mr. Betts was covered by a liability insurance policy issued by GEICO. GEICO offered to settle Ms. Buckley's injury claim by paying her the limit on Mr. Betts' policy, a total of $100,000, in exchange for an executed "full and final Release of any and all claims and liens." Ms. Buckley was covered by an automobile insurance policy by Brethren Mutual Insurance Company ("Brethren"), providing Ms. Buckley with UM benefits up to $300,000. Ms. Buckley sent two (2) letters to Brethren in order to obtain Brethren's consent to accept GEICO's settlement offer. On October 30, 2007, Brethren's adjuster sent Ms. Buckley a letter confirming that Brethren would waive any prospective subrogation action against Mr. Betts. Upon receiving Brethren's letter, Buckley accepted GEICO's settlement offer, and signed a broad release form provided by GEICO, which stated:

I/we, Ember Buckley . . . hereby Releasee(s), successors and assigns, and/or his, her or their associates, heirs, executors and administrators, and all other persons, firms or corporations of and from any and every claim, demand, right or cause of action, of whatever kind of nature, on account of or in any way growing out of any and all personal injuries and consequences [of the March 18, 2007 accident].

Buckley v. Brethren Mut. Ins. Co., No. 1855, slip op. at 3 (Md. App. Sept. 26, 2012) (emphasis in original).

After signing GEICO's release, Ms. Buckley requested that Brethren cover medical expenses beyond the amount covered by the GEICO settlement offer. When Brethren declined to pay Ms. Buckley's remaining expenses, she filed a breach of contract claim in the Circuit Court of Baltimore County demanding that Brethren pay its policy limits. Upon the completion of discovery, Brethren filed an amended answer asserting that Ms. Buckley's claim was barred by the language of the GEICO release. Both parties moved for summary judgment. On August 2, 2010, the Circuit Court entered summary judgment in favor of Brethren based upon the language of the release that Ms. Buckley had signed with GEICO.

Reversing the circuit court's entry of summary judgment, the Court of Special Appeals found that the general release between Ms. Buckley and GEICO did not relieve Brethren of its contractual and statutory duty to issue a UM payment under the terms of Ms. Buckley's policy and § 9-511. The Court found that Ms. Buckley's position was supported by the plain language of § 19-511(e). Moreover, both the purpose of the statute in assuring that auto accident victims are assured financial redress and a strong public policy in favor of compensating those injured by uninsured and underinsured motorists militated in favor of not barring Ms. Buckley's claim.

However, the Court advised that its decision did not serve to end Brethren's case. The Court found that whether Brethren consented to GEICO's settlement offer dictated further litigation. Observing that the Circuit Court did not address whether Brethren consented to the settlement with Mr. Betts, the Court advised that if Brethren can be found to have consented to settlement then it cannot contest tort liability. If, however, Brethren did not consent to the offer, then Brethren may be able to assert defenses of contributory negligence and assumption of the risk. Therefore, the Court vacated the judgment of the Circuit Court for Baltimore County and remanded the case for further proceedings.

Writing in dissent, Judge Deborah S. Eyler asserted that the outcome of the case should be dictated by the broad terms of the general release. Observing that the language of the release is clear, in that Ms. Buckley discharged Mr. Betts and "all other persons, firms or corporations" from "any and every claim" resulting from the accident, Judge Eyler argued that Pemrock, Inc. v. Essco Co., Inc., 252 Md. 374 (1969) should control the result in this case. In Pemrock, an insured sued her insurer for a breach of contract under an insurance policy covering the insured's poultry house from any direct loss caused by windstorms. The insured settled her claims against the insurer, and executed a general release similar to that which Ms. Buckley signed. When the insured's general contractor moved for summary judgment as to negligence counts brought by the insured, the Court of Appeals found that the language of the general release served to immunize any party from every claim resulting from the collapse of the insurer's poultry house. Finding that the language of the GEICO release plainly released any party from any prospective claims arising out of the auto accident, and that §19-511 did not change those terms, Judge Eyler found that Ms. Buckley released her breach of contract claim against Brethren.